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October 13, 2005

Fuzzy lines at KPMG?

Don't you just love a touch of hypocrisy? AccountancyAge has published a belter which includes Loughlin Hickey, global head honcho at KPMG's tax practice. In his piece, Hickey (sic) says:

"The traditional bright line between avoidance (using legal means to reduce
tax burdens) and evasion (illegal acts) is not sophisticated enough to delineate
the difference between appropriate and inappropriate actions in a society that
relies on a public private partnership to create wealth and regulate behaviour.

Equally the arbitrary ‘smudging’ of that line to shift the boundaries of tax
evasion to cover legal actions that have unintended fiscal consequences not only
creates uncertainties and mistrust, but could also tempt the tax agencies to go
beyond their remit to enforce the blurred definition on taxpayers.

We need to restore the certainty that acting within the law is a right and an
obligation of taxpayer and tax collector."

Who's uncertain here? Who ever thought there was anything other than a 'traditional bright line.' I don't know about you but I find it very hard to believe someone who's firm has just been given such a severe thrashing - twice. But then I suppose someone's backside was a bit sore and they couldn't sit down long enough to hold their job. Hence the promotion. Hence the new spin. And maybe long term rehabilitation back into the fold of the good and the great. Ho hum.

Comments

Good of Dennis to put this comment up. You’ll find in the link that in fact Loughlin Hickey was engaged in debate with Andrew Pendleton of Christian Aid and myself – on this occasion representing the Tax Justice Network. We have both published related reports on tax abuse in the last month – available from www.taxjustice.net.

Like Dennis I find Loughlin Hickey’s comments almost unbelievable. His firm led the market in abusive tax shelters and has had more offices in more tax havens than any other. And yet he has the nerve to stand up and want to lecture society on what should be the case in taxation. I am almost as shocked that the ICAEW tax faculty has asked him to give the Hardman memorial lecture on the themes he refers to in his Accountancy Age article on November 17. (continued in main article).

I get email post from the Tax Justice Network. The question I would like to raise is this. We are meant to be living in the 21st century. The question is simply why do we need direct, and indirect taxation to fund government programmes? What I am saying here is that new money could be created responsibly to do the job. Inflation could be controlled by supercomputers which would allow for super-flexible pricing in stark contrast to the incomes, and prices polices of the past. Moreover, not only would such an economy be tax free it could also be interest free as far as loans are concerned.

As for NGOs these could be properly funded either in full, or in part by the creation of new money. This would be a great boon for democracy, and humanity.

I know tbis sounds extremely radical but we now have the power to bring about immense positive change in the world if only we realized it.

Furthermore, as for the question of tax havens, and the super-rich not paying their fare share into their own country it would ofcourse be difficult in extremis for this to be stopped completely. It is largely a waste of time, and effort especially when we realize that direct, and indirect taxation are no longer necessary in the 21st century...We should be concentrating our energies on this, and try to understand its fantastic implications.

A brief non-technical article, or paper written by myself exists on the subject of what is called Non-Taxation Monetary Reform. Key in on the internet the search words Transfinancial Economics kheper (which is the website hosting it).

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